Union Cabinet sanctions ‘Stand up India’ Scheme

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has on 6th January 2016 sanctioned the “Stand Up India Scheme” (“Scheme”) to promote entrepreneurship among Scheduled Caste/ Scheduled Tribes (“SC/ST”) and Women entrepreneurs. The Scheme is intended to facilitate at least two projects per bank branch and on an average one for each category of entrepreneur. The key features of scheme are as detailed below:

  1.   Handholding support for both SC/ST and Women borrowers. The overall intent of the approval is to leverage the institutional credit structure to reach out to these under-served sectors of the population by facilitating bank loans repayable up to 7 years and between Rs. 10 lakh to Rs. 100 lakh for Greenfield enterprises in the non farm sector set up by such SC, ST and Women borrowers;
  2. Loans under the scheme would be appropriately secured and backed by a credit guarantee through a credit guarantee scheme for which Department of Financial Services would be the settler and National Credit Guarantee Trustee Company Ltd. (“NCGTC”) would be the operating agency.
  3. Margin money of the composite loan would be up to 25%. Convergence with state schemes is expected to reduce the actual requirement of margin money for a number of borrowers;
  4. Credit history of the borrower is built up through Credit Bureaus.
  5. Refinance window through Small Industries Development Bank of India (SIDBI) with an initial amount of Rs. 10,000 crore and creation of a credit guarantee mechanism through the NCGTC.
  6. Increasing familiarity of borrowers with factoring services, registration with online platforms and e-market places as well as sessions on best practices and problem solving.

The scheme is expected to benefit at least 2.5 lakh borrowers. The expected date of reaching the target of at least 2.5 lakh approvals is 36 months from the launch of the Scheme.

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